Duke,

I appreciate your feedback amd no, I didn't take your commentary personally.  I do believe that there are bank reps who can't for a variety of reasons, make the transition, and obviously, I don't include myself in that group.  The only point I was trying to make was that I feel like the industry (not necessarily you) has unfairly lumped most bank brokers into a stereotyped group of lazy order takers.  I honestly do feel like the at least several banks have learned from earlier mistakes and do a much better job of recruiting quality now then they did when I came into the industry (I like to consider my bank one of the lucky ones).

Also appreciate the feedback on insight on the office visits.  With your comments in mind, I feel like I can separate the hype from the actual platform and come away with a pretty good real life comparison.  Thanks again...

Have now completed both visits and have some interesting takeaways.  It appears that Raymond James' compliance is a bit stricter than LPL's.  I don't know if that's good or bad to be honest, but it seems a bit tough in places, probably due to the Herula mess.  Also, the technology in many areas seems remarkably similar (and in both cases, very solid), probably due to some personnel migration between the two firms.

I'm in teh process of listing all of the pros & cons of both firms and trying to come to a conclusion.  Next step is calling references...I asked both firms for three references that have come over from the other side.  I'm hoping that these conversations are enlightening and can prove decisive. 

The transition package seems to give RJ a slight advantage with RJ paying out unrestricted cash and LPL providing benefits with some strings attached, such as blotter credits and start-up expense reimbursements.  On the other hand, LPL looks to have a slightly higher payout and lower E&O cost.  Both firms offer start-up loans equal to 10% of trailing 12 production.

Bottom line is, despite three months of research and two very nice due diligence trips (take 'em if you get a chance), there is still no clear-cut winner.  The good news is, it looks like I could succeed regardless of which partner I choose...stay tuned...

[quote=Indyone]

Have now completed both visits and have some interesting takeaways.  It appears that Raymond James' compliance is a bit stricter than LPL's.  I don't know if that's good or bad to be honest, but it seems a bit tough in places, probably due to the Herula mess.  Also, the technology in many areas seems remarkably similar (and in both cases, very solid), probably due to some personnel migration between the two firms.

I'm in teh process of listing all of the pros & cons of both firms and trying to come to a conclusion.  Next step is calling references...I asked both firms for three references that have come over from the other side.  I'm hoping that these conversations are enlightening and can prove decisive. 

The transition package seems to give RJ a slight advantage with RJ paying out unrestricted cash and LPL providing benefits with some strings attached, such as blotter credits and start-up expense reimbursements.  On the other hand, LPL looks to have a slightly higher payout and lower E&O cost.  Both firms offer start-up loans equal to 10% of trailing 12 production.

Bottom line is, despite three months of research and two very nice due diligence trips (take 'em if you get a chance), there is still no clear-cut winner.  The good news is, it looks like I could succeed regardless of which partner I choose...stay tuned...

indyone

I recently made the move to lpl and i can tell you that it has been a great experience so far.  I have ready your posts and i think its time for you to make a decsion.  Flip a quater,  pick a number, you've researched this to death now make the call and run to freedom

Take a look at Century Securities

www.centurysecurities.com

Kusamba, you have three posts…all the same.  I’m not personally interested in another due diligence run, but I’d like to know your affiliation…are you employed by Century?  If so, you need to disclose that.  This is not a thread for spamming us with your employer’s ads…this discussion is supposed to be about a comparison between Raymond James and LPL.  If you want to go another direction, please start your own thread and quit hijacking mine!

Indyone, you said that Raymond James offered unrestricted cash. Is that a small upfront bonus to transfer?

DT,

Yes, it's an upfront bonus.  I was told 3% of trailing 12, but that's their first offer and I've heard of 5% offers...probably for higher production than my level though.  At any level, up-front money for an independent is a pretty good deal, in my opinion.  It certainly wasn't a factor in my decision to leave, but at the same time, it's a nice bonus.

IndyOne, I'm glad you eventually decided to do both due diligence trips.

There's probably not too much bottom-line difference in economics between the two firms by the time you factor in everything.  Payout at LPL is a bit higher on packaged products, but RJ is a bit higher on general securities.  As I recall, LPL is higher on tech costs (only $50/mo at RJ plus costs for Reuter's if you need it).  They also seem to do more nickle & diming on costs than RJ.  RJ's monthly fee of $250 covers e&o and most other stuff, while LPL has separate E&O, monthly fee, etc.  I don't know if they still do, but LPL hit reps with about 35 bps per month covering NASD and SIPC fees.  The point is, by the time you look at everything they're probably reasonably close, with the primary determining factor being your product mix (which may well change in the future).

Great idea on references.  Try to make sure they each give you names of reps who had been OSJs at the other firm, and not just a rep.  Also, if any of the former RJ references now with LPL are lower producers (say, under $200k) you might take their opinions about RJ with a grain of salt.  As you probably know, RJFS has spent the past couple years "counseling out" lower producers and closing branches that don't meet current minimums ($200k).   I'm sure many of them went to LPL, where the branch minimum is only $125k.  So, they may have some hard feelings about getting canned by RJ for low production.

As I've said before, you probably won't be unhappy with either choice, so this may end being a gut decision unless your pro/con list based on your particular needs/objectives is clear-cut.  As a part of your decision process you might check the temperature with a few of your "A" clients (e.g., do any of them have any preference on which firm is handling their securities; give them an RJF annual report and the LPL financials.) 

Whatever the final decision you'll sure be happier as an independent.  Thanks for sharing your process.  

Duke,

The references were very helpful and insightful.  One even talked to me from his cell phone on the putting green!  The bottom line is, while they gave me some small insights that I hadn't previously heard, none of them really bashed his/her previous firm.  I got the impression that the transitions from one firm to the other were, for the most part, amicable.

In the end, I made a very difficult decision to select one firm over the other.  Factors that decided it for me in the end were more related to the fit for my business rather than bells & whistles.  I chose based on technology that I was very attracted to.  I chose because of the conversations that I had with my prospective sales managers at each firm (this one was not even close...and my recruiter at the losing firm comfirmed that I was not the first candidate that cited the sales manager as a deciding factor).  I chose because of a major difference in compliance for my business model (working with local CPAs and revenue sharing in some instances).  I also chose because of perceived better assistance working through the non-compete (one firm told me that I would need to hire my own atty, the other indicated that we could speak to in-house counsel for some advice.  They also indicated that they would hire an atty to defend both the firm and me if necessary, and we could share atty fees, at least to a point).  Finally, I chose my firm because a friend who lives nearby was already there.  Naturally, this makes it easier to compare notes, cover for each other's vacations, etc.

In return, I realize that I am giving up some advantages by selecting one firm over the other, and I certainly don't believe that the firm I selected is the best fit for everyone, and it's obvious from this forum, that many people have selected to partner with Raymond James and likewise, many have chosen to partner with LPL.  If I ended up unhappy with the firm that I chose, I'd go to the other without hesitation (I can overcome the sales manager...I'd just ignore him).

Anyone figure out which way I've gone yet? (the guy I PM'd is ineligible to guess...and you know who you are)  Just for fun, I'll let you guess for a day before I come back and reveal the decision.

Now I just have to get about a million things done before my transition date...stay tuned...

Based on your comment about the "sales manager" and your earlier post that you didn't hit it off with the RJ guy, I'd say you're going to  LPL. 

But, if I'm right on that, some of your other comments confused me.  For example you say you'll do a lot of CPA referral biz and that was a plus for the firm you chose.  If you didn't choose RJFS, then you may be missing something.  RJ was one of the first firms in the industry to establish a formal program to share revenues with CPAs, lawyers, etc. (called their "Professional Partners Program").  I can't imagine what advantage, if any, LPL would have in this area.  If you have doubts, you might ask your RJ recruiter to put you in touch with one their OSJs in the Dallas area who's primary focus is the CPA referral program (and coincidentally he came to RJ from LPL about 5 or 6 years ago).

Also, if I understood you correctly, your firm of choice apparently gave you greater comfort on the legal support if you faced issues with your non-compete.  But, what you describe certainly seems to apply to RJ (and may to LPL also).  Neither firm can have their counsel directly represent you, because you're an independent contractor.  (If one of the firms told you you didn't need your own counsel, they lied and I'd reconsider that firm.) So, for each firm, you should get your own counsel if needed. RJ does make their in-house counsel available to review your contract, give you advice, etc. (and will work with your counsel), but they can't represent you.  Whoever told you that you could share outside counsel (and share the costs) is at best giving you bad advice, and at worse is lying to you.  If you're legally attacked for violating your contract (and the b/d is named as well, which normally isn't the case), you should still get your own counsel, because your interests are different from those of the b/d.  To help with outside counsel, RJ has a list of experienced securities attornies around the country that they've negotiated a great fee arrangement for their indy reps.  And, as a part of their transition assistance they'll help with legal fees.  My point is, if you picked LPL for better legal support, I think you either didn't get a clear picture of what RJ does or the LPL recruiter puffed a bit.

Re technology, that's very much a personal decision.  RJ's is superior to LPL in terms of sophistication and the bells & whistles, but LPL's is very good, and for what you need it may well have come across as being more comfortable. 

IndyOne, based on the above, if LPL was your choice I'd guess your decision was based more on subjective feelings (you didn't get along with the sales guy, your local friend at LPL gives you some comfort, etc.) than objective analysis, and that's obviously fine.  But, I have to admit that my great positive experience at RJ gets me riled up when someone doesn't come here, particularly when they cite some elements/perceptions about RJ that aren't entirely accurate.  One of the reasons I'm here is that I caught my LPL recruiter in at least one lie about RJ, and I couldn't be with a firm that started out the relationship that way.  But, that's my issue.  As I've said before, you can end up being happy at either firm, and you'll never look back with any regret on having made the decision to go indy.  Best of luck with your transition!!

Duke,

You guessed it right...and obviously it didn't take a lot of effort given the clues I left behind.  I'll start addressing your comments by telling you that yes, a lot of my decision process was somewhat subjective.  It was necessarily so given the fact that most of the objective comparisons (such as payout) were very close in measurement and did not really indicate a clear winner for me, so yes, company feel had a lot to do with it.  As far as recruiters went, both companies had excellent recruiters and I really didn't come across a lot of bad-mouthing about either firm.  Both recruiters did a good job differentiating their B/Ds, and lined up excellent visits.

I'll have to tell you, the professional partners program is under some serious scrutiny at RJ.  Their compliance people sat right across the table at my RJ visit and absolutely told me that this was the case, as there is a concern that RJ could potentially be liable for other areas of their professional partners' practices.  I'm confident that I heard that correctly as I asked several followup questions to verify what I'd been told.  I'm not sure what the change in view is coming from, but the compliance environment in this particular area seemed to be getting stricter.

On the legal assistance front, I can't say a lot about that at the moment, but I'll try to address it later once the dust settles a bit.  I have no doubt that RJ would do what they feel they can do, but again, there are some assurances that have been made by LPL that give me a greater comfort level.  RJ may be just as strong in legal support, but they did not articulate that in my visits, so I am only going on what I have been told and the assurances that have been made, so of course, the end result could be different than I expect.  Hopefully, this area will be pretty much a moot point as I am doing all I can to keep my litigation profile low.

On tech, there were pros and cons on both sides and frankly, the differences were not great...it was more of a fit issue with my practice.

Bottom line, other than what I just discussed, there wasn't a nickel's worth of difference relating to my practice, but unless the folks at RJ said things that were inaccurate, I think I painted about as factual a picture as I possibly could, other than things that are by necessity, subjective.  Both are great firms and had my business plan and customer book been a bit different, there is a very solid chance that I could have just as easily gone the other way with this decision.  RJ certainly has nothing to be ashamed of (although they may want to reconsider their sales mgr for my region, or at least fine-tune his presentation), as they are a very fine firm.  I would have no problem recommending either firm as a great place to go indy...

...and frankly, I'm looking forward to the transition...stay tuned...

Am now operating as an independent.  What a difference.  I have an office setup that I only dreamed about in my bank...CNBC piped right into my office, excellent equipment and excellent furniture...a beautiful setup.  Frankly, it makes my old office at the bank look pitiful.

The clients are finding me even before the ads hit the paper...$7mm in asset already committed and that's just the tip of the iceberg.  Life is good...even when you have to do paperwork...

Indy,

How long were you with the bank, and how did you do moving your book.i.e. what % of book ended up transferring? What bank were you with. Were you given a hard time with the non-compete you signed?

[quote=Indyone]

Am now operating as an independent.  What a
difference.  I have an office setup that I only dreamed about in
my bank…CNBC piped right into my office, excellent equipment and
excellent furniture…a beautiful setup.  Frankly, it makes my old
office at the bank look pitiful.

The clients are finding me even before the ads hit the paper...$7mm in asset already committed and that's just the tip of the iceberg.  Life is good...even when you have to do paperwork...

[quote=ezmoney]

Indy,

How long were you with the bank, and how did you do moving your book.i.e. what % of book ended up transferring? What bank were you with. Were you given a hard time with the non-compete you signed?

[/quote]

By necessity, I have to keep my answers somewhat vague here since this is a public forum, and frankly, it remains to be seen as to how hard a time my former employer will give me about making the move and transferring customers.  Thus far, customers are finding me through newpaper ads and word of mouth.

I am attempting to keep the possibility of a suit low by following some advice I've received, some of it obvious, like don't send any letters to your old customer base, and don't take ANYTHING with you when you go.  Some is less obvious, such as what you should and should not say when customers call you.  Some pretty innocent comments can be taken as solicitation, so it pays to be careful.

As far as how long, let's just say at least five years, and as for how much will ultimately transfer, it's anybody's guess.  I would ultimately expect to get 75-80% of the accounts that I want.  Some will stay where they are out of loyalty to the bank or pure apathy and that's fine.  I'll take what comes, but I think I'll focus on new stuff for awhile or at least until the non-solicit runs out.

The bottom line is, if you're unhappy, the money really doesn't matter as long as you can make enough tp pay the bills.  If you were successful with your old employer, you'll eventually do fine as an independent, provided you have at least some ability to run your own business.

Indy,

I have just started thinking about changing my b/d. I may go independent.

What can I do to let my clients know where I am, without getting hit with a TRO?

I have been with my present firm for a long time and do not believe I have anything to worry about in the area of a non-compete clause.

I have been told it's ok to call your clients AFTER you have made the change. Just make sure you do not mail or e-mail anything to them.

Someone else said you can not even call them. They have to find you.

Which is right?

Thanks,

Double Trouble

Double trouble, this is far too important a move to solicit advice on an internet forum.  When I went, I got out my copy of the employment contract that I signed, and spoke with a labor attorney that Bill Singer recommended to me.  I did what I was told, and never had so much as a whiff of trouble. 

The best advice I can offer, for what it's worth, is to consult an attorney.

[quote=Starka]

Double trouble, this is far too important a move to
solicit advice on an internet forum.  When I went, I got out my
copy of the employment contract that I signed, and spoke with
a labor attorney that Bill Singer recommended to me.  I did
what I was told, and never had so much as a whiff of trouble. 

The best advice I can offer, for what it's worth, is to consult an attorney.

DT, don't assume that because you've been with your firm a long time that you don't have anything to worry about.   I've never heard of a rep contract that freed someone due to tenure (except for trainee contracts relating to the repayment terms of training costs).  So, you're right to be sensitive to the issue.

While a securities attorney probably will be necessary (at a minimum for initial consultation & strategizing), you're at the infancy stage of considering independence.  So, I'd first take advantage of talking with in-house counsel at a couple of the major indy firms. They can't ultimately represent you, but they can offer some good overview of the good, bad & ugly of your potential contractual problems.  Once you've gotten reasonably serious with an indy firm (and they're interested in you) your recruiter there can set up a conference call with one of their lawyers.  When you've decided to make a move, they can then refer you to competent counsel & may have even negotiated some favorably fee arrangements.